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Nest cuts contribution charge to 1.8%

Nest has cut its planned charge on contributions from 2 per cent to 1.8 per cent.

The annual management charge will remain at 0.3 per cent, as previously announced by the Government.

Under the structure contributions will be charged on the way in, but not on the way out. If a saver makes a total contribution of £100, £98.20 will be invested. The 0.3 per cent AMC will be levied annually on the value of individual’s pension pots. All of Nest’s costs will be met by its membership.

Nest managing director of scheme development Helen Dean says: “This is great news. Members of Nest will have a scheme with a charge level approaching the best in the market.”

Nest points to the charges which currently apply to the stakeholder cap. It says a typical 36 year old scheme member would experience a 5.8 per cent reduction in the value of their pot in Nest as a result of charges, compared to 13 per cent in a stakeholder cap. The analysis assumes pension providers a stakeholder cap charge of no more than 1.5 per cent of a member’s funds under management for the first 10 years, falling to 1 per cent thereafter.

Nest chief executive Tim Jones says: “Today’s announcement underpins our low charge offer – we have a charge level which approaches levels only found in the best of today’s pension schemes. This is a level that our target market would be unlikely to access without Nest in the market.”


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. No matter how much its charges are whittled down, NEST is (IMHO) the wrong approach. Whatever NEST may achieve could have been brought about much less expensively by way of legislative changes (to make tax-assisted saving for retirement less offputting than it is at present) allied to schemes offered by UK-based providers.

    Heaven knows the UK needs more employment opportunities (all the NEST jobs will be in India and the US) and the UK economy needs stimulating (how much NEST money will end up being invested in or at least via the UK? Not much.)

    NEST is largely a slap in the industry’s face for not having embraced the stakeholder white elephant. It’s a pity the government refuses to recognise why.

  2. And how exactly long do they plan on taking 1.8% of the premiums?

    Sounds a little like trail commision.. I wonder how many annual reviews they will be providing?

  3. NEST will I suspect be seen by many low paid workers as a tax, not as a savings vehicle.

    Charges are not the real issue here.

    If we had lower taxes and a much reduced State then people would be free to choose their own savings vehicle and at lease be able to afford to save rather than have it forced upon them when they may think they have better use for this money.

  4. If the government made available to everyone who pays tax and NI contributions the same type of pension scheme that public sector workers enjoy then everyone could look forward to a decent retirement.

    Instaed we have pension apartheid with those that work in government paid jobs having wonderful pension provision effectively funded by the private sector and those who work in the private sector being offered ‘crumbs off the table’. Low charges doesn’t mean good value or even that it makes sense to join NEST. And, as for the self-employed, they are simply ignored – no pension, no sickpay, no holiday pay, no job security except of their own making, no health and safety – just tax and regulation.

    We need a revolution where all the people ripping off the public at large (politicians, banks, council officials, the judiciary, the Royal family ……….) are sent packing. It would be a better world without all these cretinous cheats and liars.

    That’s my rant for the day – I do feel better !

  5. Adam | 24 Nov 2010 4:08 pm


  6. I say what a dam nerve taking a charge on the contributions and I don’t want a lecture from those in the industry,saying they have their overheads.I have been overseeing my husband’s pension with a well known provider who recently re-branded at great expense,to find his contributions had been paid into the wrong account.Who found this error ,yes you guessed it me and they certainly were never going to own up to it.I should be issuing this provider with a charge for gross incompetence,not the other way round.

  7. The charges are irrelevant.. For a long time Joe Public does not trust the Government whatever colour they may be.

    …..and quite rightly so – a pension scheme brought in by the very people that dont seem to be able understand their expenses or this country’s taxation systems..

    Bet if I avoided paying CGT I would get more than a couple of days embarrasement in the press.

    Then as pensions are finance related – the Banking system – say no more…

    NEST really hasnt got a hope in hell of getting off the ground until the benefits can be seen, understood and trusted… so lets stop throwing good money after bad… – how much has it cost so far….???


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